Regency Alliance Insurance Plc is set to ask its shareholders to approve a special resolution to raise N3 billion in new equity capital at its upcoming 31st Annual General Meeting (AGM) scheduled for October 30, 2025, in Lagos.

This move comes as part of the company’s broader strategy to comply with regulatory requirements, strengthen its financial base, and position itself for future growth.

The capital raise, which may be executed via public offer, private placement, rights issue, or a combination of these methods, is among the key items on the planned AGM agenda filed with the Nigerian Exchange Limited (NGX) on Tuesday, October 7.

NAICOM’s recapitalisation directive

The proposed N3 billion issuance is in response to a regulatory directive which requires insurance firms to boost their capital base.

However, the planned share issuance is coming at a time when the Nigerian Insurance Industry Reforms Act (NIIRA) 2025, recently signed into law by President Bola Ahmed Tinubu is being implemented.

NIIRA has overhauled the legal and operational framework of the insurance sector, mandating stricter capital adequacy, governance, and solvency standard.

This initiative aligns with Section 124 of the Companies and Allied Matters Act (CAMA) 2020, which empowers public companies to increase share capital subject to shareholder approval.

Meanwhile, Regency Alliance’s decision is seen as a proactive step to bolster its capital base and meet the new requirements of the National Insurance Commission (NAICOM).

Regency Alliance Insurance Plc reported a profit before tax of N240.2 million for the period ended June 30, 2025, marking a significant decline of 67.6% compared to N740.4 million recorded in the same period of 2024.

Insurance revenue fell to N5.07 billion from N6.92 billion in H1 2024, reflecting a contraction in the company’s core underwriting business.

Despite the increase in net investment income—rising to N838 million from N740.2 million in the prior year—the overall insurance and financial result declined to N1.19 billion, down from N1.66 billion, representing a 28% year-on-year drop.

Operating costs rose notably, with other operating expenses increasing to N529.7 million, compared to N345.6 million a year earlier.

Earnings per share (EPS) fell sharply to 3.60 kobo, down from 11.10 kobo in H1 2024, underscoring the impact of the weaker bottom-line performance.

Income tax expense remained high at N801.1 million, only slightly lower than the N970.8 million reported in the previous year.

The company posted a loss after tax of N182.4 million in Q2 2025 (April–June), reversing a profit of N286.8 million from the same quarter in 2024.

While macroeconomic headwinds and increased costs weighed on profitability, the uptick in investment income and the company’s ongoing recapitalization efforts may provide a foundation for recovery in the second half of the year.